VPI to invest up to $496 million in German battery projects

Vitol-backed power company VPI will invest up to 450 million euros (USD 496 million) over the next three to five years in battery projects in Germany, VPI’s chief executive Jorge Pikunic has told Reuters. 

Vitol is the world’s largest energy trader.

Germany’s renewable power capacity accounts for 40% of the country’s electricity. It wants to ramp it up to 80% by 2030. This also requires more energy storage to help balance demand and supply.  

VPI, which has power assets in Britain and Ireland, said the battery joint venture with German energy storage firm Quantitas Energy would be its first investment in the country.

Since solar power produces more electricity during midday, the German power market is subject to high intra-day price volatility. In such a situation, batteries help companies sell power during highs and charge when prices are low.  

“In Germany a lot of the opportunity (for batteries) is on the wholesale market... and that is because a lot of the renewable base is solar which creates price differentials within the day,” VPI Chief Executive Jorge Pikunic told Reuters.

The investment aims to develop up to 500 MW of battery storage capacity over the next three to five years, and the JV expects to build 10 projects, mostly in the wind power-rich northeast.

Pikunic said most of the projects would have a 60 MW capacity.